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Tuesday, 3 January 2012

Unimproved Land Value QLD Stupid rate.

Unimproved Value QLD Stupid rate.

Under changes to the land valuation process introduced last year, suburban properties were judged on "site value", rather than "unimproved" value", which takes in market value of the land in its present state.

Brisbane northside residents are fuming over Queensland Government land valuation hikes of up to 35 per cent in the face of a plunge in actual property prices.
Recently issued state government valuations for the Grange showed an average jump of 29.6 per cent in the 12 months to October, 2010, while median property values fell 5.8 per cent in Real Estate Institute of Queensland estimates.
In the neighbouring suburb of Gaythorne, average land values jumped by 26.5 per cent, compared with a 4.3 per cent drop in the median house price.

In contrast, the maximum average increase in land value in the southside suburb of Rochedale was 10.3 per cent.

However, Go Gecko real estate agent Brendan Terry said he could not reconcile the great discrepancy in the figures.

"It's been an awkward time, for me, and I would assume all other agents, trying to communicate to our vendors their property in the eyes of the state government is going up [in value]," he said
"But in the eyes of the buyer it's actually going down.

"It's actually causing conflict between vendors and agents. I've seen a lot of vendors jumping from agent to agent and I put it down to this inconsistency.

"I'm not sure why the state government has gone down this path."
Grange resident Ben Charlton, whose house is on the market, said he too could not understand the stark difference.

The land value of his property increased $140,000, from $290,000 to $430,000, in the year to October 2010.

The increase in values is not expected to greatly impact on annual council rate which are based on the average land value from the past three years, Brisbane City Council said.
Mr Terry said it would also have little impact on market sales.

"We've had every vendor in these areas call us, excited about their land value going up with the assumption that's going to draw more people to the area," he said.
"But in actual fact, property [prices] are going down and buyers know that.

Lutwyche saw the largest increase in values of 34.5 per cent, but there were insufficient sales in the suburb for REIQ to calculate a reliable median house price.

How your rates are calculated

Georgia Waters

The release of Brisbane land valuations yesterday will have repercussions on rates bills across the city, but not as much as some might think.
Brisbane City Council rates are released in the annual budget, due this year on June 8.

To determine the rates a property owner will pay, the average land value from the past three years is calculated. However, if the three-year average is higher than the current year's valuation, then the lesser value is used. *
Land values are determined by the Department of Environment and Resource Management.

While the average land value in flood-affected Brisbane suburbs plummeted in the order of 15.6 per cent, values of unaffected properties increased between 18.2 and 34.5 per cent.

But those fluctuations won't be reflected in this year's rates, but rather the average value over the past three years.
The last three values are added then divided by three to give an average rateable valuation for a given year. *

"However, if the three-year average is higher than the current year's valuation, then the lesser value is used"

Land valuations are what a property could sell for without structures such as houses or sheds on it, evcavations necessary for structural improvements, such as building foundations, or existence of leases or development applications. The valuation does, however, take into account improvements such as clearing, levelling and drainage works.
It can be affected by the property’s position, including how close it is to facilities including schools and shops.

Land placed under one of 47 rating categories, depending on whether it's a house, apartment, and in the CBD or suburbs. Each category is given a dollar rate (for example, 0.4 cents in the dollar) - which will then be multiplied by the property’s average rateable valuation to determine a rates charge.

The dollar rate for each category is set in the annual council budget.

Change your trust to avoid Queensland land tax!

by ribalaw

The Land Tax Act 2010 was introduced last year. It will potentially increase the land tax that some owners have to pay even if valuations have decreased! Anyone who has more than one investment property should take care to examine the manner in which their investments are held.The section of the Act to look out for is Section 20.

Accountants and advisors will sometimes recommend to property investors that they consider holding each investment property in a different trust. One reason for having more than one trust is so that land tax is reduced. Until 30 June 2011 this was all that was needed in order to reduce land tax. Land Tax law has changed. Unless you make changes before 30 June 2011 this may no longer work.

Although separate trusts may be set up all family members are often listed as potential beneficiaries of each of these trusts.

Section 20 provides that if a trustee, is the trustee of more than one trust and the beneficiaries of each trust, are also the same beneficiaries then land tax is not separately assessed against each property. The value of the properties is combined.

For an investor who owns two properties each valued at $340,000.00 this means potentially paying $7060.00 land tax.

If section 20 did not apply there would be no land tax to pay, as each property valued separately at $340,000.00, falls under the threshold.

The changes that need to be made to avoid paying land tax in this situation are relatively simple and very inexpensive. The most obvious solution may be to appoint a new trustee to one or more of the trusts.